Bitcoin (bitcoin) is an intangible digital currency and a special type of payment system. This money cannot be held in your hands, but you can pay with it when making purchases in online stores. The transfer of bitcoins from user to user is the transfer of encrypted data.

This cryptocurrency is based on two qualities - absolute anonymity and reliability of intra-system transactions.

Bitcoin (BTC) is not associated with banks, states, gold reserves, as it is only a set of symbols obtained as a result of solving the problem. As conceived by the creator, only demand, which is deliberately limited, can influence its course.

According to the created algorithm, the number of BTC cannot exceed 21 million units. Virtual coins appear gradually, and the process of their emission should approximately end in 2140. The basic principle of the existence of this currency is the constant calculation of the encrypted function.

A user who decides to create new bitcoins installs special software on his computer. The ultimate goal of numerous calculations is the creation of a decentralized free currency. This process was called "mining" (mining - mining). Mining is based on a cryptographic algorithm that converts data into a bit string.

Attitude towards bitcoin in different countries

Does the cryptocurrency have a chance to be in circulation along with real currencies or can it be treated as a game? There is no definite answer to this question yet. Most economists are skeptical about this money. They consider them a soap bubble, noting that the value of bitcoins increases due to speculation, and the volume of its real use for trading does not change. Some financiers consider cryptocurrency transactions to be like a financial pyramid on a global scale.

Nevertheless, if something can be purchased for virtual currency, then it can be considered a means of payment to some extent. Thus, the German Ministry of Finance defined the status of bitcoin as a “unit of financial accounting”, that is, it recognized it as a type of money. In the United States, a federal court has ruled that BTC meets the concept of money.

The first ATM is already operating in Vancouver, Canada, where you can exchange bitcoins for the traditional national currency and vice versa. It is noteworthy that in the first week of operation of the exchanger, transactions were made in the amount of more than 100,000 Canadian dollars.

But in some states the new currency is not recognized. It is completely banned in Thailand. China, which used to be sympathetic to bitcoins, from 02/01/2014 banned financial institutions from any transactions with their participation. But such a ban was not introduced for individuals.

The Central Bank of France also spoke disapprovingly about the cryptocurrency. The regulator issued a press release calling the new currency a speculative and risky instrument. In Russia, bitcoins are called money surrogates. This was stated in the official statement of the country's Prosecutor General's Office. Representatives of the department said that the official currency of the Russian Federation is the ruble, and the use of monetary surrogates is prohibited by the current legislation of the country.

The reasons why financial regulators in individual countries do not consider virtual money as legal tender are obvious. This currency does not have an issuer, so there are no formal grounds for referring it to securities or banknotes. It is also difficult to call it a payment system, since there are no licensed operators that manage the turnover and bear legal responsibility.

No financial institutions are involved in making payments in bitcoins. Payments are made directly and it is not possible to cancel the payment. Information about the payment made by the payer is distributed throughout the network and is accepted by all its other participants if the payment complies with the rules. Incorrectly made payment is rejected. Usually there is no commission when paying, but it can be voluntarily paid to expedite the processing of the transaction.

Addresses are anonymous and do not contain information about their owner. The address consists of text about 34 characters long. It includes numbers and letters of the Latin alphabet. Bitcoin addresses can be represented as QR codes, as well as other 2D barcodes that are readable by mobile devices. A Bitcoin user can create multiple addresses on their own initiative.

Acquiring a new address is all about creating a new key pair, and it doesn't even require a network connection. Obtaining an address for only one correspondent or for one transaction enhances anonymity. The storage of funds is the wallet file located on the computer. They can be transferred to any user using a Bitcoin address.

Based on the properties of the Bitcoin system, it is compared with gold. The Bitcoin resource is limited: the more bitcoins are mined, the more difficult further mining is. The resource cannot be copied; theoretically, the value of coins only increases over time. But virtual bitcoin is different from physical gold. You cannot buy something twice for the same coins. Cryptographic protection and the system algorithm will not allow this. The advantages of cryptocurrency, in comparison with gold, include the speed of transactions. The operation can be initiated even from a mobile phone, being at any distance from the recipient, the payment will be made in a few minutes.

Bitcoins are accepted as payment for hundreds of services and stores. There is an opinion that just as at one time e-mail limited the functioning of the traditional one to a minimum, and Skype pressed the telephone companies, Bitcoin will be able to take its place in payment systems.

Perhaps virtual money will compete with the usual monetary circulation. The traditional currency has long become unsecured paper and is printed in any volume. Moreover, this process enriches some people and devalues ​​the share of other owners of "candy wrappers", which are much more than the first. But it is still impossible to accurately predict the development of Bitcoin.

How is the price of bitcoin formed?

The course of BTC and other cryptocurrencies is formed on specialized exchanges, based on supply and demand, as it should be for any such asset. However, due to the rather low total capitalization of the currency, it is heavily influenced by big players and mass panic. This is clearly visible on the charts of cryptocurrency rates.

Bitcoin is absolutely not protected from speculation and is subject to strong volatility. For example, in 2013, its rate increased from $30 to $240 as a result of the banking crisis in Cyprus. Subsequently, quotes exceeded $1240. In total, in the incomplete year 2013, the exchange rate increased by 9500%. But in December, the bubble burst due to restrictive sanctions in China. The depreciation happened to $400. Since 2014, bitcoin has been steadily growing. In mid-February, the rate reached $620.

Almost every owner of several tens of thousands of military-technical cooperation can, using the general confusion and excitement around what is happening, collapse or raise the market. Local and global bitcoin pumps happen regularly and will happen as long as people are ready to buy and invest.

The BTC exchange rate, like any other currency, grows with an increase in demand. When players are ready to buy, it gradually rises. A sharp rise in the rate means not so much an explosive interest in the currency as the arrival of a pumper bull on the exchange.

Players with large assets (pumpers) can quickly buy sell orders and raise the rate to the maximum value in the shortest possible time. Pampers create the appearance of a stable growth in the exchange rate, provoking newcomers to buy. By dumping at the peak of activity, they dump their assets. The bitcoin exchange rate drops to the minimum values.

The popularization of the currency through advertisements and good news also causes the rise of the cryptocurrency. The more users are informed about the product, the more they will want to invest in it or play on the stock exchange. Bitcoin is advertised in all the media of the world, which contributes to the growth of its rate.

Experienced traders are good at recognizing course changes such as correction, sinking and falling. A correction is a smooth increase or decrease in the exchange rate after a sharp fall or rise. However, if a correction in a certain period of time is observed on all exchanges with large trading volumes, this may mean that an instant drain is coming.

A drain is considered a sharp drop in the exchange rate by 15% or more. A drain is triggered by bad news, a dump, or a panic, much like China’s cryptocurrency restrictions. A drop means a medium-term moderate drain, as a result of which the price of military-technical cooperation decreases by no more than 5-7%.

Correction and rebound (a sharp short-term change in the price of bitcoin in the opposite direction) happen almost constantly. When playing on corrections and rebounds, the only serious problem is not knowing the minimum level of fall in the cryptocurrency rate (bottom) on which to buy.

A drain (dump) is an action planned in advance by large players, which is impossible to foresee, but theoretically can be anticipated. A long-term dump that lasts several days usually ends up being a drain. As a rule, the upcoming drain is foreshadowed by far-fetched negative news, escalation of the situation in chat rooms and the desire of pumpers to create a panic in the markets.

It is quite difficult to predict the fall or rise of the bitcoin rate without having serious assets. However, you can protect yourself from falling into a negative stream and avoid losing all your money. It is necessary to closely monitor the dynamics, trend and news. Constantly analyze the situation, not be afraid to make thoughtful decisions and even merge at a loss, but at the right time.

The cost of military-technical cooperation is not supported by any organization or government. Like other currencies, bitcoin is worth something, as people are willing to exchange it for services and goods. But its course is constantly fluctuating. Investing in bitcoins is quite risky. Early on, the system lacks widespread adoption and is therefore quite vulnerable.

Supporters of the system do not deny that no one promises money, the nominal value of which was provided and guaranteed by the state (fiat). The liquidity of the cryptocurrency is not guaranteed. Its non-speculative value is provided only by those goods or services that can be purchased for bitcoins, and does not depend on the global mass of commodities. The more people wish to use the new currency, the higher its rate will be.

Perhaps later, when bitcoin is more known, its stability may increase, but now the rate changes are quite unpredictable. Investing in cryptocurrencies should be carefully considered, and a clear risk management plan should be drawn up. The deflationary model of the military-technical cooperation itself assumes an increase in the exchange rate over time, but it is not guaranteed by anyone. Therefore, you should not invest in Bitcoin the last savings or amounts that are significant to you.

There are two options for investing in bitcoins. In the first case, money is simply invested in Bitcoin in the expectation of an increase in the rate. In the second, profit is obtained by speculating on fluctuations in the value of bitcoin. Bitcoin speculation can only bring income to players who understand trading. The rate of cryptocurrency is characterized by changes in the rate of tens and even hundreds of dollars a day. In the case of a correctly predicted movement of the exchange rate, the profit can be quite substantial.

Prospects for Bitcoin

Many doubt the viability of Bitcoin. Much in the system is incomprehensible and resembles the famous financial pyramids. In fact, the developers of the program are unknown. There are various assumptions about who is hiding under the pseudonym Satoshi Nakamoto. The rules for issuing bitcoins gave clear advantages to the first users of the system.

In 2013, block generation required half a million times more operations than at the beginning of the system. The task becomes more difficult and requires much more resources and costs, while the value of the reward has decreased. Differences from the pyramids in the system, of course, are significant. Structures like MMM are based on a referral program. Profit is obtained only by inviting new members. Bitcoins are earned regardless of attracting fresh users. On the contrary, with an increase in the number of participants, mining becomes more difficult.

The number of participants in the Bitcoin network is relatively small, although it is the leader among cryptocurrencies. After a sharp rise in the price of bitcoins in 2011, other similar systems appeared: Namecoin, Litecoin (LTC), Novacoin. But they have yet to achieve the popularity of Bitcoin. These currencies are traded relative to BTC and have the same rate changes. Many experts are distrustful of digital currencies and consider them a kind of pyramid scheme. Some suspect that these systems are "feeling for the way" to the creation of a new world currency, which should replace the dollar that has lost its credibility.

Despite the fact that the number of merchants willing to accept cryptocurrency is growing, its share in the global economy remains microscopic. This speaks of bitcoin more as a fashion trend than a real means of payment. It is possible that the number of virtual currencies in the near future may increase (there are already several dozen of them), but in the future there will be no more than three to five of them. Their courses will be extremely unstable, and the probability of recognition is small. Whether bitcoin will be among them is impossible to say today.

Each country has its own currency. In Belarus and Russia - the ruble, in the USA - the dollar, in Ukraine - the hryvnia, in China - the yuan. So the Internet also has its own money. Now only the lazy have not heard about virtual funds, almost everyone has WebMoney or Yandex money. They prefer to store such funds in online wallets. Many people even receive a salary with virtual money, which they then withdraw to a plastic card or pay with it in online stores. It is now possible to order equipment, pay utility bills or even order food over the Internet. The virtual world is developed at such a high level that you can live almost without leaving the screens. And if so, then this world should have its own currency.

If you are reading this article now, you probably wondered: “Bitcoins - what is it?” The answer is very simple at first glance. Bitcoins are virtual The new cryptocurrency was created in 2009 by a programmer (s), under the pseudonym Nakamoto Satoshi. This person (group of people) is unknown to anyone (s). The creator came up with not only the currency itself, the algorithm of operation, but also a special bitcoin wallet - an application in which you can keep them (agree, this is very convenient). When you read this name, eastern associations immediately arise, you can decide that they created the currency in Japan, but there are suggestions that the program was actually developed by an American scientist who communicated with fans of the currency on various forums, but then for some reason stopped any contacts. The last message from him was left in 2011.

It is also known that as soon as this brilliant man appears, he will suddenly become an unheard-of rich man. During the first time of the creation of bitcoins, he became the owner of hundreds of thousands of coins. Considering that 1 bitcoin is worth a lot, their owner will become a multimillionaire. Although, you see, it would be strange to create something without wanting to receive benefits in return, especially since money, even if it is electronic, has become an object and a creation. The proverb that left the shoemaker without boots rarely works in our time, it is rather the exception than the rule. Gavin Andersen is now the lead developer of a high-profile and profitable cryptocurrency project.

The properties of bitcoin coins are no different from ordinary money in any country:

• You can use them when paying for products or services.
• It is possible to exchange for other types of currency.
• They serve as a store of value.

Bitcoins - what is it? In fact, this is a kind of cryptocurrency, i.e. a type of digital money. Accounting and emission of bitcoin is based on cryptographic methods. In a distributed Internet network, it works decentralized. There is also a similar cryptocurrency in the online space, only it functions faster. This virtual money is called Litecoin. Both monetary units can be compared to a precious metal such as silver or gold. It should be noted right away that both currencies are not connected with the pyramid.

The difference between bitcoin and conventional payment systems

This currency is completely decentralized. Other payment systems (such as Visa) are owned by companies that work in their own interests. Bitcoin has no owner or manager. It is distinguished from the rest by a peer-to-peer structure. Thus, all owners of bitcoins are equal, and their computers are engaged in processing transactions among themselves, managing the process using the Internet.

Another important difference is that this system has its own currency. These are new monetary units - bitcoins. What this means for society, we will analyze further in the article.

This is the world's first open network, which became such thanks to full decentralization. If you want to create a conventional financial network, you will have to work with many banks, follow all the intricate rules and regulations. Bitcoin is not such a system, it does not require someone's permission or help to create a financial service based on it.

Bitcoin - what is it in simple terms?

Cryptocurrency is a common software product. How much 1 bitcoin will cost does not depend on the number of depositors, but on supply and demand for it.

Work process

The actions of participants on the Internet are very simple and quickly implemented. No intermediaries are required, transactions pass instantly from one to another interested person. The seller receives money directly from the buyer. No need to change anything in the bank or transfer to the card - just send bitcoins to the right person directly. Let's answer the question again: bitcoins - what is it? For dummies (even they will understand) - this is a mathematical cache code. Each is unique in its own way, it cannot be used twice.

Is it an imaginary currency?

This question arises for almost everyone who encounters Bitcoin for the first time. The market dispels all doubts. One has only to pay attention to the bitcoin growth table. The truth is that the currency is not stable, there are sharp jumps or falls, but for 4 years now, as the upward trend has dominated, the bitcoin rate has been growing. This project was launched in 2009. Then for a while people wondered: Bitcoins - what is it? The rate was low, but over time, more and more people were interested in it, and it began to grow. What attracts people? For some, this is a protection against inflation, for others - a profitable investment.

The bitcoin exchange rate is constantly changing. In general, the dynamics of growth is positive. Today, 1 bitcoin in dollars is equal to 230.9 units. Agree that the rate is impressive for the money invented by someone.

Where to use the new cryptocurrency

Bitpay, a wonderful company, announced in 2012 that thousands of users (merchants) were willing to accept bitcoin payments. A year later, the figure was 10,000 outlets. You can use the Shopify platform to find more than ten thousand online stores where you can pay with virtual money, including bitcoin cryptocurrency. Thanks to this, it no longer matters what currency: bitcoin, dollar or euro, will be used for payment, the main thing is the desire to purchase goods. You can even say more: many stores prefer cryptocurrency, as it reduces costs, and you can offer the goods to the buyer much cheaper. They also prefer adult stores and online games.

Also, coins can be used as international payments (Western Union), which are very slow, inconvenient and expensive nowadays. Bitcoin is an international system, thanks to which the process will become more pleasant, simple, fast, convenient, and most importantly, it will be cheaper, if not completely free.

Illegal use

Bitcoins are often used for illegal purposes. This is truly dangerous for society. Nobody should suffer. But, unfortunately, the world is such that people will find a way out of any situation if they need to pull off an illegal deal. If not Bitcoin will help them in this, then some other system. Whether or not to blame cryptocurrency is a personal matter for everyone, but all its advantages make people vehemently oppose the “cover” of bitcoin.

Satoshi Dice, for example, allows people to get involved in gambling, which is punishable by law in many countries. The Silk Road website has been causing a lot of misery and evil until recently, as dealers have sold millions of dollars worth of illegal substances through it. Also, the porn industry, which is constantly looking for ways to get around the laws, is interested in cryptocurrency.

Process of creation

In the ordinary world, money is printed or minted in Central Banks. The Bitcoin system works differently. Many computers around the world process transactions over the Internet. The computers that perform these actions are called "miners". The process of processing bitcoin transactions is "mining". Every 10 minutes someone wins a race in computing, gets a reward. Thanks to this stimulation, more and more people are constantly joining this process. The reward is reduced every four years. So, in 2012 it was 50 BTC, now it is 25 BTC, and in 2016 it will not exceed 12.5 BTC. It becomes clear that bitcoins will soon cease to be mined.

Will there be deflation?

Let's take the USA as an example. All their loans are paid in dollars. If the rate jumps, then people will not be able to pay them. Bitcoin is not used as a settlement currency, there are no long-term leases or loans in cryptocurrency. Even the bitcoin organization itself, which pays workers in bitcoin by setting rates, uses the dollar, then converts it into its own currency.

Mining process

Now we have dealt with the question: bitcoin - what is it. And how to earn them - now comes to the fore. This process is called mining. To extract valuable electronic coins, you need to solve complex mathematical equations. The computer uses the brute force method. The only sad thing is that a regular PC will not work, miners use super-powerful servers or mega-productive computers. There is a lot of competition among miners. The winner is determined every 10 minutes and given 25 coins. Since the network is constantly growing, mining has become a very difficult process.

Other ways to get currency

Now it has become difficult to mine bitcoins. That this is almost unrealistic - we have already seen. However, there are other ways to get this currency for yourself. So what are the options?

• Buy bitcoins for other virtual or real money.
• Sell ​​the goods to the buyer for these coins, you can also get them for a bitcoin wallet for the services rendered.
• Exchange with one of the private individuals.

Good points in currency

The fact is that cryptocurrency has some advantages even over conventional money. Let's consider them.

Currency code open

What does it mean? Bitcoin uses the same method as internet banking. The only difference is that the information is open, i.e. you can always see when and how many coins were transferred to the wallet. Hidden is only information about the recipient or sender of the payment. Whose bitcoin wallet, no one can find out, except for their owners, since no one else has access to personal information.

Can't get inflation

Coincidentally, the time it takes to get the coins is equal to the rate at which precious metals like gold are mined. Money used to be backed by something, but now some countries are issuing more than they can realistically afford. This is not possible in cryptocurrencies. Bitcoins are limited to 21 million coins. Thanks to this, the Internet currency has become more reliable than usual, and perhaps even better than gold. Mathematical calculation guaranteed the lack of coins. Thus, forecasts are made that virtual money will not depreciate, but on the contrary, over time, the bitcoin rate will only increase. This is the rule that the creator put into the wallet program. As with any rule, there are exceptions, so in this system they came up with a way out. It so happened that any change in the bitcoin wallet system can only be made with the consent of 99% of users. This is the true crown of democracy.

No one can control the exchange between wallets

Neither banks, nor tax inspectorates, nor the state can do this. A very useful thing. It is a pity, of course, that this allows any fraud to occur, but nothing can be done about it.

Transactions without borders

No one can freeze an account. You can pay from anywhere in the world, to anyone and for anything (again, cons, since you can pay for illegal goods).

You do not pay taxes for transferring funds

Enough with the bank charges. Cryptocurrency will allow you to avoid unnecessary costs or significantly reduce them compared to expensive bank transfers, which are also inconvenient to use.

You can't counterfeit this money, you can't cancel it

The system is absolutely honest (mathematics cannot be otherwise), with great potential. Many online stores already accept this currency. Coins cannot be copied or spent multiple times. The above arguments allow us to consider bitcoin as a fairly reliable means of payment.

Flaws

As with everything that surrounds us, there are downsides to the idea of ​​cryptocurrency. The bitcoin rate is very dependent on the news. Namely, from what the politicians of different countries of the world say. But, in general, this is a good opportunity for long-term investments.

How to use magic coins

Everything is very simple. For bitcoins, you can buy goods in online stores, pay for online games, and completely anonymously, make payments across all countries freely.

Where to store coins

1. Online wallet. You can access it from your phone, tablet, computer. Easy to use. Everything is similar to other wallets: WebMoney or Qiwi.
2. Offline wallet. It is installed on a computer (you can only log in from it using a password). The big downside is that if you forget your password or your hard drive crashes, you can say goodbye to your savings.

The data of the two types of wallets is stored on the server, and, as you know, it can be hacked.

Investment

As we have already understood, virtual money is an excellent type of investment. The fact is that sometimes there are active surges in the growth of bitcoin. Just at such moments, you can make very good money. One of the unprecedented surges was in 2013.

Pizza Story

In 2010, an ordinary American bought a pizza for 10,000 bitcoins, which was little money then. If he had kept them, he would have become a dollar millionaire.

Still, I would like to warn that investing in cryptocurrency, as well as this process as a whole, is a very risky undertaking. Here it is worth drawing an analogy with gold, the fact is that in the long term, the risks are reduced. Here, as they say, who does not take risks, he does not drink champagne!

Will bitcoins replace regular money?

Such a scenario is possible, but unlikely. The fact is that the population wants to use a convenient and more or less stable currency, because today it is the dollar. But the fact that bitcoin will become a competitive currency is very likely. Over time, the system will be upgraded, become more convenient, simpler and universally applicable.

Bitcoin Millionaires

The leaders are the Wicklevoss brothers. These guys became famous for their lawsuit against Mark Zuckenberg. Both boys are now 31 years old. They invested US$11 million back at a time when there was little public questioning, “Bitcoin – what is it?” The brothers sensed the potential right away. Their contribution to date is 400 million US dollars.

Tony Gallippi wins silver for the best bitcoin investment race. Since 2011, he has been actively buying cryptocurrencies for small amounts and has now reached a result of 100 million US dollars.

Roger Ver is known to everyone thanks to his charitable work, which made the cryptocurrency famous.

Charlie Shrem receives a well-deserved third place (bronze). He created the BitInstant service. His fortune is estimated at 45 million US dollars. For these achievements, he thanks bitcoin.

Jared Kenna is the owner of the last, but no less important, fifth place. In 2010, he bought 5 thousand bitcoins. Now he has 111 thousand 114 BTC on his wallet.

How many satoshis are bitcoins made up of? What is it: 0.00000001 BTC? These are not prime numbers. This means that 1 Satoshi equals the above figure from Bitcoin.

So what is this bitcoin? Is it zero without a wand or a real way to make money? You never know where you will find and where you will lose. But on the example of the considered millionaires, it is clear that they took the risk correctly.

Perhaps soon the ranks of millionaires who got rich on cryptocurrency will be replenished by you? Take risks, but do not forget that both an unprecedented “rise” and a rapid “fall” are always possible, therefore, approach decisions regarding money carefully and deliberately.

bitcoin ban

For the first time in the world, this currency was banned in Thailand. The fact is that Bitcoin Co applied to the Bank in order to obtain a license for the official circulation of its currency. However, they were denied this. There is already a ban on bitcoins in Bolivia due to the fact that people can suffer impressive losses because of them. Ecuador wants to introduce its own "Bitcoin". At the government level, they are considering this issue and want to get rid of competitors. There are also debates in Belarus about banning bitcoin settlements at the legislative level, and possibly even introducing a ban on virtual money in connection with the fight against drug dealers who receive funds for electronic wallets. Russia is also against private virtual money.

In general, will the issue of issuing private money, which, in fact, are bitcoins, become resolved? Can they be taxed? Will the state be able to make money on this system? These are all important questions to consider before rejecting bitcoin as a means of payment at the state level. In the United States and Canada, the phenomenon is being carefully studied, and until the emergence of a regulatory framework on this issue, financial institutions are not recommended to use bitcoin.

Fans of online earnings should definitely try out this type of investment in order to form their own opinion. It seems that bitcoin has a right to exist. Perhaps, if there is a question about the illegality of cryptocurrency everywhere, then amendments will be made to the rules for using it, but people should not lose their investments!

Bitcoins - what is it? Feedback from experienced users and beginners who are just starting their journey in investing in cryptocurrency is usually positive. Especially for people who consider bitcoins as a long-term investment. The fact is that by buying 1 bitcoin today for one amount, you can get 3 times more money and pleasure in a year or three, without straining at all. Those who wanted to invest for a short period of time are usually dissatisfied, because the exchange rate is unstable. Bitcoin can always “fall” and disappoint the depositor for a long time. Just because of this situation, one can often hear or read arguments on the topic: “Bitcoins - what is it? "Divorce" or salvation from inflation?

Someone loses money, and someone becomes even richer. Everything should be approached with intelligence and common sense. You can’t just rely on your own experience to say that it’s worth investing in bitcoin money, but it should be noted that many people become richer right before their eyes, having made a choice in their favor. Perhaps this option is much more reliable than buying lottery tickets, casino games and horse racing bets. We hope that we have satisfied the curiosity of citizens and fully answered the question in the article: “Bitcoin - what is it?” Photos are also presented for a better understanding and perception of the text by readers.

The popularity of the electronic currency Bitcoin skyrocketed in the second half of last year (2013), when its rate went up rapidly. Today for 1 BTC they give 23,879 rubles. The direct name of this currency is formed from two words: bit, which means a unit of information, and coin - a coin.

Users are offered an electronic payment system that does not have a single center, since the entire process of its turnover is supported by the users themselves. At the same time, the currency is stored on electronic media belonging to the system participants in the form of a specific cipher. The undoubted advantage of this system can be considered its autonomy, supported by a certain independence. Practically no one can influence it and, for example, block or ban it.

The origin of the very idea of ​​Bitcoin came from Satoshi Nakamoto, who presented an article to the public six years ago showing the benefits of a new electronic payment system based on cryptography. The main idea of ​​the idea was to create a currency that is not subject to any power structure. At the moment, Nakamoto is not involved in any way in the development of the system, and it is being developed thanks to independent developers who have united in a large group.

How Bitcoin works

Bitcoin turnover is based on pure mathematics. The issuance of coins is carried out in accordance with mathematical formulas that are available to everyone and anyone can make sure that they work on the basis of a certain algorithm.

This cryptocurrency is hosted on computers that keep the system running as a whole. In this case, complex mathematical equations, called "hashes", are calculated. The community of users supporting the circulation of bitcoins is a computer network that facilitates all necessary transactions. Community members provide the power of their computer systems for a certain fee.

The existing bitcoin algorithm limits the release of coins, so no more than 150 coins can be issued per hour. At the same time, every 4 years the number of coins to be issued is halved. Based on this, by 2140 the maximum amount of coins will reach 21 million pieces. Each coin is divided into a sufficiently large number of parts, where the smallest (one hundred millionth) is called "satoshi".

Key Features of Bitcoin

1. Everyone can take part in the system.
2. Transfer of bitcoins is made without intermediaries.
3. The user has the ability to create any number of wallets and details.
4. Transfers are anonymous and do not involve commissions.
5. Refund and blocking of transactions is not possible.
6. Bitcoins are stored on the user's computer or on some electronic medium.

How to get Bitcoin

There are several ways to get bitcoins.

1. Buy on specialized exchanges, for example, BTC.
2. Contact the services of specialized exchangers, for example, ALFAcashier.
3. Buy directly from bitcoin holders.
4. Get into mining.

We will dwell on the last point in more detail and try to figure out how you can get Bitcoin for free.

Bitcoin Mining

The word mining comes from the English version of mining, meaning the development of mountain deposits. Accordingly, miners are miners, as for our case, here we mean miners of virtual currency.

If we consider the issue from a technical point of view, then mining should be understood as the calculation of the so-called hash of the block header, which includes the header of the previous block, a random number and a translation hash set. In the event that the hash value is less than the target at the moment, a new block will be formed and the miner will receive 25 bitcoins. Otherwise, the next hash will be calculated.

An increasing number of transactions and money transfers around the world are made using the Internet. Payment for utilities, orders in online stores, replenishment of a mobile phone account and even transfer of wages - this is not a complete list of financial transactions carried out using electronic money.

The most popular payment systems among Russian users are YandexMoney and, which have been successfully operating for a fairly long period of time. At the same time, not everyone knows that in the virtual world there is its own currency called "Bitcoin". Bitcoin - what is it in simple words, and how can an ordinary Internet user become its owner?

Bitcoin - how does it work?

Bitcoin is a digital currency that allows you to carry out any financial transactions without restrictions on territorial, financial and other grounds. This currency is not tied to a particular country, and therefore does not obey the rules established by the legislation of a particular state, but at the same time allows you to use it anywhere in the world.

The bitcoin exchange rate does not depend on fluctuations in oil quotes or prices for precious metals, decisions taken by the leadership of any country and other factors that play a very significant role in the formation of national currency rates.

An innovative system of mutual settlements between participants in the trade turnover was created in 2009 by an unknown person (or group of persons) working under the pseudonym Satoshi Nakamoto. In addition to the currency itself and the algorithm for conducting financial transactions, the developers have created a special application that allows you to simplify the procedure for transferring funds as much as possible.

Bitcoin is the world's first payment system that does not depend on external influences, i.e. not obeying the rules and instructions established by various banking and other intermediary organizations. All operations are carried out with the participation of two parties - the seller and the buyer, i.e. money comes from the account of one to the account of another, bypassing third-party organizations that charge a certain commission for their participation in transfers. In essence, bitcoin is a unique mathematical code that is constantly changing and cannot be used twice in mutual settlements.

The bitcoin rate is provided by the demand of users who have a wallet in this payment system. Theoretically, the currency could depreciate in the event that its holders begin to withdraw their stored money to the wallets of other systems, but at present this outcome is unlikely. Now the bitcoin rate is $430 per unit of cryptocurrency, which indicates a very high degree of its reliability.

Benefits of Bitcoin

The main advantages of the payment system are:

• its independence from the influence exerted by third-party financial institutions and public authorities;
• the ability to use the internal currency of the system in any country in the world;
• absolute independence from ;
• high degree of protection of the wallet on which electronic funds are stored;
• the impossibility of freezing an account in the system by decision of the authorities;
• no fees and commissions when making transfers within the system.

How to get bitcoins?

Bitcoin works on the following principle: many computers connected to the system around the world process transactions in real time. With an interval of 10 minutes, some machines participating in the computing race become winners, bringing their owner a profit in the form of virtual money. This process is called mining, and the computers used are called miners. In order to take part in the process of extracting money in this way, you must have a super-powerful server with serious technical characteristics. In addition, competition between cryptocurrency miners is constantly intensifying, which leads to a decrease in the likelihood of obtaining money through mining.

There are other ways to replenish your wallet in the Bitcoin system:

• purchase of internal currency for real or virtual money used in other payment systems;
• selling a product or service to a consumer for bitcoins.

So, bitcoin is a fundamentally new cryptocurrency, used exclusively for settlements on the Internet, and does not have any security other than user demand. The creator of the payment system that uses bitcoins for settlements is still unknown.

Many Internet users are wondering: what is bitcoin (bitcoin, btc, btc, cue ball)? In short, it is a decentralized (which means it cannot be counterfeited or banned) electronic currency, completely protected from wear and tear and emission. In the first 2 years of its existence, the idea did not leave the boundaries of the World Wide Web itself. The population simply did not know about the currency or did not understand what bitcoin was. But in a number of countries in South America and in Japan, it is already recognized as a means of payment. There, along with the state currency, you can use bitcoin.

Bitcoin what is it? What is bitcoin? (+video)

What is bitcoin in simple words? The first thing you need to know is that it is a virtual currency and it functions both on computers and on mobile devices. In addition, the bitcoin currency does not have a central administrator and no human control. As a result, this turns into significant benefits for users.

The creation of the Bitcoin payment instrument was started in 2008 by a programmer under the pseudonym . The new currency came to world fame after 2 years, demonstrating a steady upward trend. The name of the creator gave the name to the smallest particle (one ten-millionth share) - Satoshi.

How do cryptocurrencies work (on the example of bitcoin)?

So how is it set up? To understand the principle of operation, it is best to compare it with an online bank, payment system or a real bank. Transfer in traditional payment systems looks like this:

1. You send the bank a request “I want to send 5 rubles from account A to account B”.
2. The bank or server decides whether the payment can be made and charges a fee.
3. Money comes from your account to the one you specified.

This results in a large number of inconveniences for the user: a server malfunction, problems with the law at the bank or any other issues make both payments and, possibly, withdrawals from the account inaccessible. Now let's see what bitcoin is, how the system works.

The electronic currency bitcoin uses a special algorithm (blockchain), which evenly involves each computer operating in the system in operations. At the same time, the devices themselves are not connected geographically in any way and can be located in different parts of the globe. Each device is also used to store information about current funds, everything is encrypted and duplicated many times.

Bitcoin payment algorithm

If we simplify and write in the style of "bitcoin for dummies", then the sequence of events when sending a payment in cryptocurrency is as follows:

1. You create a request "I want to send 5 rubles from account A to account B".
2. The algorithm decides which computer will process your transaction.
3. There is an "inscription" of information about the transfer to all devices in the system.
4. Bitcoins are also credited to account B.

How does Bitcoin work? Bitcoin what is it? All technical details (video)

How many exist?

Many are interested in how many bitcoins are in the world at the moment. Their approximate number is slightly more than 17.5 million (as of February 2019). The system provides for the creation of a new bitcoin by means of the fact that you use a special device for computing operations and processing transaction data -. But it won’t be possible to “print” a lot of new currency in this way - the system has a limit on the number of bitcoins created per day (3600 BTC).

There is a maximum allowable number of btc, upon reaching which mining (the creation of new currency units) will no longer be possible and it is 21 million. Using simple calculations from current indicators, it is easy to calculate that the increase in the number of virtual coins to the maximum will stretch for 150 years (approximately 2140), which means that the questions “how many bitcoins can there be in the world?” and “how many zeros does it have?” you can simply not ask yourself.

Bitcoin what is it and what is its value in practice for the end consumer? There is no even theoretical possibility to produce such an amount of cryptocurrency that it would lead to a fall in its price for a long time. A vivid example: the US dollar has fallen more than 300 times over the past 100 years due to the emergence of more and more new money. At the same time, only one structure had control over their release. As a result, the investments and savings of millions of people could and could depreciate at any moment. In fact, this statement works for every classical currency and payment system.

How is bitcoin different from electronic and paper money?

There are a huge number of differences between cryptocurrency and conventional (fiat) money. Therefore, it is difficult for many to understand what bitcoin is for. Let's try to figure it out:

• The theoretical impossibility of inflation. Even the creators of the system will not be able to “print” more bitcoin. Their number is set at the level of the program code. If earlier it was possible to engage in the creation of new units of currency (mining), now its number has irrevocably stabilized.
• The absence of any intermediaries when conducting operations with bitcoin: no server or other user will be able to either accidentally or intentionally block the transfer or stop the system - the military-technical cooperation is not subject to outside influence.
• Decentralization means that the operation of the system is provided by each computer connected to it separately. In fact, the virtual currency bitcoin will exist until at least one device works. And now there are tens of millions of them in the world and the number is growing exponentially.
• The absence of a central node, administration and management means that no legislative and regional bans on bitcoin Internet money apply. When making transfers within the system, the cryptocurrency is not subject to the jurisdiction of any state or individual.
• Very high performance. Even international transfers take up to several minutes, regardless of the time of day and your location. And the commission for one transaction is minimal. In this component, the electronic currency bitcoin has no equal.

A few more differences

• Translation records are public and publicly available. You can track where your money went and where it came from. At the same time, anonymity remains at a high level.
• Easy registration: the online currency bitcoin does not require the disclosure of personal data. You do not need to go through complicated procedures to create. The process takes a few minutes at most. The number of accounts is also not limited.
• The division into ultra-small shares opens up completely new opportunities for trade and entrepreneurship that were not available before. In most cases, there is no transfer fee at all or less than $0.01.
• No one, under any circumstances, can block your account. After creation, it will exist as long as the system itself works.
• No one can take away the money located on your wallet - not even the state. As long as you own the account key, you have a true 100% money back guarantee. The digital currency bitcoin is completely safe.
• The number of transfers, the volume of sent or received bitcoins are simply absent.
• For all the time of searching in the system, almost no critical bug was found, the client for work is constantly updated. The software is convenient even for those who do not know why bitcoins are needed.
• Rise in cost. No type of fiat money has increased by several thousand times in a decade. Compared to fiat, the online currency bitcoin, which is already over $ 3,600 apiece (February 2019), was able to easily increase demand and rise in price.

So, what are bitcoins and how to earn them in 2019. There are several ways to get cryptocurrency at once:

1. On the stock exchanges.

At the moment, there are quite a few really working and usable options:

The main part of the market (about 70%) is held by the btc-usd pair. Most of these services require authorization, which includes sending scanned documents for verification.

2. Exchange services for bitcoin and other cryptocurrencies

• Telegram Bot for Bitcoin
• Telegram for Bitcoin Cash
• Telegram for Ethereum
• Telegram for Litecoin
• Telegram for DASH
• Telegram bot for DOGE (Dogecoin)

They work on a principle that is completely similar to ordinary exchange offices, they charge a fixed percentage for the operation. Synchronization of the rate several times a day with one of the exchanges listed above. Allows you to purchase btc using almost any traditional payment method.

3. Bitcoin -

Sites that give away a small portion of bitcoin for free. There is no danger to the user in them - the service simply uses your computer for certain operations, such as mixing the flow of funds. The amounts that can be received on this account are extremely small, but the process itself will allow you to answer questions like “Do I need a virtual currency bitcoin btc?”, “What is bitcoin and how does it work?” etc.

4. Purchase "from the hands"

On the Bitcoin forums, you can find a large number of cryptocurrency owners in your city. It is important to carefully monitor the reputation of the seller and ask in which services it is possible to quickly check the receipt of funds. This is not difficult even for those who do not know how to work with bitcoins.

A few years ago, the aforementioned mining (bitcoin generation) could be included in the list. But now the popularity of cryptocurrency has reached too high a mark. With a limit on the daily rate of created blocks, this makes earning even meager funds in this way an almost impossible task.

Cryptocurrency bitcoin: how can it be used?

And yet, what to do with bitcoins? There are many options for both earning lovers and investors, and suitable for less risky users who do not know what bitcoins are and why they are needed:

1. Storage

The best answer to the question of what bitcoins are for. If we analyze the graph of the behavior of the price of the currency against the dollar, then the unconditional maximum fell on December 2017 - $ 20,000. Bitcoin virtual money, the rate of which exceeds $3,600 per 1 BTC (February 2019), periodically breaks value records. In addition, all trends indicate that the demand for cryptocurrencies will grow very quickly and in 2 years they will displace international payments from the market. Where is it better to store bitcoins is an ambiguous question and it will be discussed in one of the sections below.

Given the limit on the amount of currency in the system (21 million), with an increase in demand, bitcoin electronic money will inevitably increase in price. Another thing is that the requirements for the security of your computer are increasing significantly. For all transfers in the system cannot be canceled in any way. In fact, it is precisely the initially laid down restriction that Bitcoin is provided with. There is basically no chance of devaluing your deposits in the long run. It is worth thinking about how to store them now.

2. Make international payments

Among freelancers and remote employees, paying with bitcoins has become commonplace. It's cheap, reliable, and anonymous, which is what he's always been famous for. The principle of operation of which is based on decentralization and powerful encryption. In addition, this is a very simple process: even those who do not know what bitcoin electronic money is will be able to figure it out in two minutes.

3. Pay for services with bitcoin

At the moment, btc can be paid with Dell, Microsoft and Amazon. Not to mention hundreds of smaller stores and services. In the countries of the European Union, South and North America, as well as in the Far East, they can easily pay for food, clothes and other small goods. Bitcoins in the world are in great demand. Even in Russia, Rostov-on-Don, a well-known cafe began to accept them.

4. Gamble, bet on sports

Gamble, make sports bets, use for trading on stock exchanges, even if they simply do not exist in your country. Everything here is limited only by the imagination of the developers of various projects and the possibilities of cryptocurrency. After all, what is bitcoin in simple terms? Ability to spend money anonymously and quickly.

Disadvantages of bitcoin

Although bitcoin has many advantages, the currency also has a lot of disadvantages and it is worth considering them in the process of getting to know each other:

1. If a virus erases your bitcoin wallet file (this applies to accounts that are on local devices) or can track your password, your money will not be returned. In addition, there is also a fairly large amount of space occupied here. The entire block of transactions (beginning of 2019) already occupies more than 200 GB. This is a consequence of how the cryptocurrency works. Secure synchronization (updating the database) will also take some time. As a result, this will affect the usability.
2. If you figured out why Bitcoin is needed and decided to invest, you may face a price drop due to lack of demand. The value of a cryptocurrency is determined by capitalization and demand (and only by them) - this is a consequence of how bitcoin works.
3. Bitcoin virtual money does not support refunds in case of password theft or fraud. As a result, no one has sufficient power and authority to reverse a bitcoin transaction unless it is returned to you by the person who appropriated it.

Outcome

Now we have dealt with the question of bitcoin that it is an interesting alternative to money that has the right to exist. Yes, the currency has a number of disadvantages, but they are completely offset by a huge list of advantages and the ever-growing demand for cryptocurrencies. Over time, its price and importance in the world will only increase.

Now we figured out what the essence of bitcoin is. Tell us your opinion about this digital currency. How long has she come to our world and what will be her future? Let's share our experiences and help each other in this.